Meals provided by restaurants
Generally, a restaurant, or any part of a store that is considered to be a restaurant, imposes the meals tax on the sale of any food or beverage (including alcohol) that is prepared for human consumption in a way that it doesn't need any significant additional preparation or cooking to make it edible.
Example: If a restaurant serves a patron a lasagna dinner, then the dinner is taxable. However, if the restaurant also sells frozen lasagna dinners that patrons heat in their own homes, those frozen dinners aren't considered meals and therefore aren't taxable because they need additional preparation.
Example: If a patron buys a pizza and 2 cans of soda from a restaurant, then both the pizza and sodas are taxable. However, if they buy a pizza and a 2-liter bottle of soda to go, then the pizza is taxable, but the bottle of soda is exempt since it was sold in an unopened original container of at least 26 fluid ounces.
Meals provided by other establishments
Any store not ordinarily considered a restaurant must also charge a sales tax on certain food items if those items are sold in a way that they can be considered a meal. A meal includes food or beverages that don't need further significant preparation, whether or not they are packaged or wrapped and whether or not they are taken from the place where they were bought. The following stores have to charge a sales tax on the taxable meals they provide:
Bakeries: When a bakery sells food items commonly sold at snack bars, coffee shops or luncheon counters, such as taxable beverages or sandwiches, the entire bakery is considered a restaurant, and its baked goods sales are taxable except when sold in units of 6 or more for takeout. However, if the bakery in some way separates the restaurant part of the store from the rest of the store, the bakery part remains a store, and its sales generally are not taxable. In that case, only the restaurant part is considered a restaurant for tax purposes. A separate restaurant part cannot be established if taxable beverages or other meals must or may be purchased from the area, section or counter from which baked goods are sold. Some separation of space and function is necessary.
Delicatessens: A delicatessen is generally considered a store with a restaurant part. Prepared foods including meat, poultry, or fish items—fried chicken or barbecued spareribs for example—are taxable if sold heated. Sandwich meats or cheeses (sliced or whole) and whole cooked meat, poultry, or fish sold unheated are not taxable.
Grocery stores, markets, supermarkets: Sales from a bakery, delicatessen, or restaurant part of a grocery store, market or supermarket are taxed as previously described; sales of food products (groceries) are not taxable. However, a supermarket salad bar where shoppers buy salads and pay by weight is a restaurant for the purpose of the meals tax. Therefore, the salad is subject to tax.
Generally, the sale of prepared meat, poultry, or fish items (including meat, poultry, or fish parts or pieces, such as fried chicken wings or barbecued spareribs) heated or in a combination plate is taxable.
Convenience stores: Convenience store sales of the following items are taxable:
- Poured or fountain-type beverages
- Combination plates sold as a unit reasonably and commonly considered a meal, heated or not
- Single-portion entrees such as lasagna, eggplant parmesan or quiche, heated, or refrigerated if the store provides a heating unit, and prepackaged or not
- Heated prepared foods
- Quick meals, such as hot dogs, hamburgers, pizza or soup, heated, or refrigerated if the store provides a heating unit, and prepackaged or not
- Sandwiches, whether or not prepackaged or heated
- Unpackaged snacks such as fresh-popped popcorn
Honor snack trays and vending machines: Honor snack trays and vending machines that sell food generally are considered restaurants for purposes of the meals tax. An exception is made when the honor tray or vending machine is used to sell only snacks (food or beverage) or candy with a sales price of less than $3.50. If the sales price of any single item sold through an honor tray or vending machine is $3.50 or more, then all sales are taxable.
Restaurant meal delivery companies: A restaurant meal delivery company is a vendor of meals bought from restaurants for resale and delivery. The restaurant meal delivery company must provide a Sales Tax Resale Certificate (Form ST-4) to all restaurants on all purchases of meals that it resells and delivers to its customers. The company must also register with DOR, collect the 6.25% sales tax (and, where applicable, the 0.75% local option meals excise) on the sales price paid by the retail customer for the meals (excluding separately stated delivery charges and tips) and send the tax to DOR. For purposes of the local option meals excise, the location of the consumer will determine whether and where the local option meals excise will be imposed.
A restaurant that sells meals to a restaurant meal delivery company must accept a Massachusetts Sales Tax Resale Certificate (Form ST-4) from that restaurant meal delivery company. Once the form is accepted, the restaurant doesn't have to collect and send the sales tax on meals to the Commonwealth. See Sales Tax Treatment of Restaurant Meals that are Resold by Restaurant Meal Delivery Companies for more information.
Please note that businesses facilitating the sale of meals on behalf of restaurants are not subject to the marketplace facilitator rules. Such businesses are not required to collect and remit tax on the sales of meals, as long as the restaurants themselves are registered to collect and remit tax. DOR may issue further guidance relating to the responsibilities of businesses facilitating the sales of meals. Any later change that would apply the marketplace rules to these businesses will be applied by DOR on a prospective basis.
For more information on a store not mentioned here, feel free to reach out to DOR's Contact Center at (617) 887-6367.
Sales of food and beverages by the stores listed above are subject to the tax if the items are sold in a way that it could be considered a meal. The following items sold in stores are taxable:
- Beverages: Poured beverages, such as a cup of coffee or a fountain soda.
- Unpackaged baked goods: Unpackaged baked goods or other snacks are generally taxable unless sold in units of 6 or more to be taken out. Baked goods in units of 6 or more include any variety of items totaling 6 or more servings. For example: 2 bagels, 3 muffins and 1 danish; or a whole pie, cake, loaf of bread, etc. However, a bakery may sell any amount of unpackaged baked goods tax-free if it sells only baked goods, or if it keeps its restaurant sales separate as required by DOR regulation.
- Hot foods: Any heated prepared food item.
- Entrees: Single-portion-size entrees (e.g., lasagna, eggplant parmesan or quiche) prepared to be eaten immediately, if heated. Refrigerated items are also taxable if the store provides heating units (typically microwave ovens) customers can heat their entrees with. Such entrees are taxable, prepackaged or not. Frozen entrees are not taxable.
- Combination plates: Prepared foods sold as a unit reasonably and commonly considered a meal, heated or not. Foods that are otherwise not taxable do not become taxable simply because they are purchased together. The sale of a half-pint of potato salad and a half-pint of tuna salad for off-premises consumption is not taxable unless the items are presented or served as a unit in a way that is reasonably and commonly considered a meal, such as sold as a plate or packaged as a dinner for a single price.
- Quick meals: Meals prepared for immediate consumption such as hot dogs, hamburgers, pizza slices or soup (if heated). These are also taxable when refrigerated if the store provides heating units (typically microwave ovens) customers can heat their quick meals with. Frozen quick meals are not taxable. Selling sandwiches is taxable, prepackaged or heated.
Other types of taxable items included in sales price
The sales tax on a meal is generally based on that meal's sale price. In some situations, the sales price of a meal upon which the tax is imposed may include the tip, or related room rental or recreational admission charges. The following situations describe where some items are considered taxable:
Service charges included in the sales price of the meal: Generally, separately stated amounts labeled as service charges added to the price of a meal are included in the sales price when such amounts are part of the consideration for food and beverages. However, separately stated amounts labeled as gratuities, service charges or tips aren't included in the sales price of the meal if they are distributed by the vendor to the service employees, wait staff employees or service bartenders. If the service charges are paid in part to the waiters or other service personnel, then the charges are included in the sales price of the meal and subject to the sales tax.
Room rentals for serving meals: If a room is rented for the purpose of serving a meal, and the room's operator provides a meal, the room charge is included in the meal price subject to the tax, separately stated or not. If a room is rented for purposes other than serving a meal, and light refreshments are provided, the sales tax only applies to the sales price of the refreshments if the charge is stated separately on both the vendor records and the customer bill. If the charges are not separately stated, the entire amount charged is subject to the sales tax.
Admission charges for entertainment or recreation: The sales tax is imposed on admission charges collected by a place of entertainment where food and/or alcoholic beverages are sold, unless all the following requirements are met:
- A ticket is sold and collected as evidence of the admission charge
- The patron is not required to buy any food or beverages
- The charge is for admission only and doesn't include any payment for food or beverages
- The admission charges are separated from other receipts in the books and records of the place of entertainment
Discounted meals: If a vendor offers customers, upon presenting a coupon, a discount from the usual price of a meal, the tax is only due on the actual amount the vendor charges the customer. So if a restaurant offers a patron 2 meals for the usual price of 1 due to a coupon, the price of the free meal is excluded from the meals tax. See 830 CMR 64H.1.4: Discounts, Coupons and Rebates for more information.